Managerial Accounting Overview

These flashcards cover key concepts and definitions related to managerial accounting based on the lecture notes.

Managerial Accounting

The provision of accounting information for a company's internal users, not bound by GAAP.

Planning

The detailed formulation of actions to achieve a particular end, requiring setting objectives and identifying methods.

Controlling

The managerial activity of monitoring a plan's implementation and taking corrective action as needed.

Decision Making

The process of choosing among competing alternatives, intertwined with planning and control.

Financial Accounting

Primarily concerned with producing information for external users and must conform to rules defined by agencies.

Managerial Accounting Objectives

To provide information for planning, controlling, and making effective decisions.

Activity-Based Costing (ABC)

A more detailed approach to determining the cost of goods and services, improving costing accuracy.

Data Analytics in Managerial Accounting

Utilizing various data analytic perspectives and techniques to create financial insights for improved decision-making.

Customer Value

The difference between what a customer receives and what they give up when buying a product or service.

Value Chain

The set of activities required to design, develop, produce, market, and deliver products and services.

Total Quality Management (TQM)

A philosophy referring to manufacturers striving for an environment that enables the production of perfect, zero-defect products.

Enterprise Risk Management (ERM)

A formal way to identify and respond to important threats and opportunities facing an organization.

Ethical Conduct in Managerial Accounting

The requirement that profits be achieved through legal and ethical means.

Competency Framework

Explains essential roles and interconnected skills, including data governance, analytics, and visualization.

Certified Management Accountant (CMA)

A designation that requires passing a rigorous exam, relevant experience, and ongoing education.

Certified Public Accountant (CPA)

The oldest and most well-known certification in accounting, allowing individuals to serve as external auditors.

Certified Internal Auditor (CIA)

A specialized certification for internal auditors, requiring technical competence and experience.

Advantages of Certifications

Each certification offers particular advantages to a managerial accountant, evidencing the holder’s professional competence level; there is a connection between managerial accounting, internal auditing, and public accounting due to overlapping competencies and standards

Strategic Positioning

Effective cost information helps the company increase customer value and create a sustainable competitive advantage; leadership involves providing the same or better value at lower costs than competitors by different strategies (cost leadership, differentiation)

Lean Accounting

Organizes costs according to the value chain and collects both financial and non-financial information

Cost Leadership

provide the same or better value to customers at a lower cost than competitors

Superior Products through differentiation

increase customer value by providing something to customers not provided by competitors

Line positions

have direct responsibility for the basic objectives of an organization

Staff positions

have indirect responsibility for an organization’s basic objectives